Patent BendingDing-a-ling! The ITC blows up the cell-phone market. Wall Street OpinionJournal
Saturday, June 9, 2007 12:01 a.m. EDT
Paging U.S. Trade Representative Susan Schwab: Please call us on your cell phone. And better do it fast because cell phones may soon be harder to come by thanks to one of the dumber rulings ever by the U.S. International Trade Commission.
By a 4-2 vote on Thursday, the ITC decided to ban the import of any new cell phone model produced with certain microchips made by Qualcomm. ITC Chairman David Pearson dissented on grounds that the ban was antithetical to the public good, which is certainly true. But the import ban is effective immediately, and this means that President Bush, through Ms. Schwab, has just 60 days to set the ruling aside before it becomes permanent. There's an overwhelming case for doing so.
The ITC's power to ban foreign-made, patent-infringing products goes back to the infamous Smoot-Hawley Tariff of 1930--which ought to be a hint that this is a bad idea. The fear was that American intellectual property would be stolen by foreign firms, which would use U.S. patents to produce goods overseas without paying royalties and then ship those products to the U.S. The law was never intended to substitute for domestic patent-infringement suits in federal courts between two American companies, which is the story here.
The patent holder in this instance is California-based Broadcom, which has sued Qualcomm for infringement. Broadcom owns several patents relevant to the production of certain cell phones sold by Sprint, Verizon, Alltel, as well as T-Mobile and AT&T.
In other words, pretty much every large cell phone operator in the country sells at least some phones that contain the allegedly infringing chips.The ITC tried to soften the blow of its ruling by grandfathering existing models and applying the ban only to future models. This was presumably a nod to the extraordinary breadth of the ban:
Nobody, including Broadcom, actually makes competing chips in the U.S., so an import ban is tantamount to a total ban. However, anyone who's shopped recently for a cell phone knows that the future arrives fast in that industry, with new models coming all the time.
more:
http://opinionjournal.com/weekend/hottopic/?id=110010192 *** - On the bright side, with cellphones banned, the NSA won't be able to listen in on our phone calls....